EXHIBIT 10.17
Right to Purchase 20.64 Shares of
Class A Voting Common Stock
of
MJD COMMUNICATIONS, INC.
THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR UNLESS, IN THE OPINION OF COUNSEL TO THE STOCKHOLDER, WHICH COUNSEL MUST
BE, AND THE FORM AND SUBSTANCE OF WHICH OPINION ARE, SATISFACTORY TO THE ISSUER,
SUCH OFFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, TRANSFER OR OTHER
DISPOSITION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE
ACT, SUCH LAWS AND THE STOCKHOLDERS' AGREEMENT OF THE ISSUER, DATED AS OF JULY
31, 1997 (THE "STOCKHOLDERS' AGREEMENT").
THIS WARRANT AND THE SHARES OF STOCK PURCHASABLE UNDER THIS WARRANT
ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER CONDITIONS, AS SPECIFIED IN
THE STOCKHOLDERS' AGREEMENT, COPIES OF WHICH ARE ON FILE AT THE OFFICE OF THE
ISSUER AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS WARRANT AND
SUCH SHARES UPON WRITTEN REQUEST.
No. AW1
MJD COMMUNICATIONS, INC.
Amended and Restated Class A Voting Common Stock Purchase Warrant
MJD COMMUNICATIONS, INC., a Delaware corporation (the "Company"),
hereby certifies that, for value received, Xxxxxx Xxxxxxx ("Holder"), or its
assigns, is entitled, subject to the terms set forth below, to purchase from the
Company at any time or from time to time after the date hereof, subject to the
provisions of Section 2.3 hereof, 20.64 fully paid and non-
assessable shares of Class A Voting Common Stock (as defined in Section 11
hereof). In all cases the shares of Class A Voting Common Stock purchased
hereunder shall be at an initial purchase price per share of $.01 (such price
per share as adjusted from time to time as provided herein is referred to herein
as the "Exercise Price", which price shall in no event be less than the par
value of the Class A Voting Common Stock). The number and character of such
shares of Class A Voting Common Stock and the Exercise Price are subject to
adjustment as provided herein. This Warrant amends and restates in its entirety
the Class A Voting Common Stock Purchase Warrants represented by warrant
certificate nos. W-5 and W-13 issued by the Company to the Holder on June 6,
1996 (the "Original Warrants").
This Warrant shall be subject to all of the terms and conditions of
the Stockholders' Agreement as if it were "Common Stock" or otherwise
constituted an "interest therein" (as such terms are defined and used in the
Stockholders' Agreement).
1. DEFINITIONS. Terms defined in the Stockholders' Agreement and not
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otherwise defined herein are used herein with the meanings so defined. Certain
terms used in this Warrant are specifically defined in Section 11 hereof.
2. EXERCISE OF WARRANT.
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2.1 Exercise. This Warrant may be exercised in whole or in part
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prior to its expiration by the holder hereof at any time or from time to time,
by surrender of this Warrant, with the form of subscription at the end hereof
duly executed by such holder, to the Company at its principal office,
accompanied by payment by check payable to the order of the Company or by wire
transfer to its account, in the amount obtained by multiplying the number of
shares of Class A Voting Common Stock for which this Warrant is then being
exercised by the Exercise Price then in effect. In the event the Warrant is not
exercised in full, the Company, at its expense, will forthwith issue and deliver
to or upon the order of the holder hereof a new Warrant or Warrants of like
tenor, in the name of the holder hereof or as such holder (upon payment by such
holder of any applicable transfer taxes) may request, calling in the aggregate
on the face or faces thereof for the number of shares of Class A Voting
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Common Stock equal (without giving effect to any adjustment therein) to the
number of such shares called for on the face of this Warrant minus the number of
such shares (without giving effect to any adjustment therein) for which this
Warrant shall have been exercised.
2.2 Warrant Agent. In the event that a bank or trust company
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shall have been appointed as trustee for the holder of the Warrant pursuant to
Section 5.2 hereof, such bank or trust company shall have all the powers and
duties of a warrant agent appointed pursuant to Section 12 hereof and shall
accept, in its own name for the account of the Company or such successor entity
as may be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 2.
2.3 Termination. This Warrant shall terminate upon the earliest
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to occur of (i) its (and any replacement Warrant's) exercise in full or (ii)
July 31, 2016.
2.4 Commencement of Exercise Period. This Warrant shall be
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exercisable at any time and from time to time after the date hereof.
3. DELIVERY OF STOCK CERTIFICATES ON EXERCISE.
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3.1 Delivery. As soon as practicable after the exercise of this
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Warrant in full or in part, and in any event within ten (10) days thereafter,
the Company, at its expense (including the payment by it of any applicable issue
taxes), will cause to be issued in the name of and delivered to the holder
hereof, or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, a certificate or certificates for the number of
fully paid and non-assessable shares of Common Stock to which such holder shall
be entitled on such exercise, together with any other stock or other securities
and property (including cash, where applicable) to which such holder is entitled
upon such exercise.
3.2 Fractional Shares. In the event that the exercise of this
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Warrant, in full or in part, results in the issuance of any fractional share of
Common Stock, then in such
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event the holder of the Warrant shall be entitled to cash equal to the fair
market value of such fractional share as determined in good faith by the
Company's Board of Directors.
4. ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In
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case at any time or from time to time, the holders of Class A Voting Common
Stock shall have received, or (on or after the record date fixed for the
determination of shareholders eligible to receive) shall have become entitled to
receive, without payment therefor:
(a) other or additional stock or other securities or property by
way of dividend; or
(b) other or additional stock or other securities or property by
way of spin-off, split-up, reclassification, recapitalization, combination
of shares or similar corporate restructuring;
other than additional shares of Class A Voting Common Stock issued as a stock
dividend or in a stock-split (adjustments in respect of which are provided for
in Section 6 hereof), then and in each such case the holder of this Warrant, on
the exercise hereof as provided in Section 2 hereof, shall be entitled to
receive the amount of stock and other securities and property which such holder
would have received prior to or would have held on the date of such exercise if
on the date hereof it had been the holder of record of the number of shares of
Class A Voting Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property receivable by such holder as aforesaid during such
period, giving effect to all further adjustments called for during such period
by Sections 5 and 6 hereof.
5. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
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5.1 Certain Adjustments. In case at any time or from time to
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time, the Company shall (i) effect a capital reorganization, reclassification or
recapitalization, (ii)
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consolidate with or merge into any other Person, or (iii) transfer all or
substantially all of its properties or assets to any other Person under any plan
or arrangement contemplating the dissolution of the Company, then in each such
case, the holder of this Warrant, on the exercise hereof as provided in Section
2 hereof at any time after the consummation of such reorganization,
recapitalization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Class A Voting
Common Stock issuable on such exercise prior to such consummation or effective
date, the stock and other securities and property (including cash) to which such
holder would have been entitled upon such consummation or in connection with
such dissolution, as the case may be, if such holder had so exercise this
Warrant immediately prior thereto, all subject to further adjustment thereafter
as provided in Sections 4 and 6 hereof.
5.2 Appointment of Trustee for Warrant Holders Upon Dissolution.
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In the event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall, at its expense, deliver or cause to be delivered the stock
and other securities and property (including cash, where applicable) receivable
by the holders of the Warrant after the effective date of such dissolution
pursuant to this Section 5 to a bank or trust company having its principal
office in New York, as trustee for the holder or holders of the Warrant.
5.3 Continuation of Terms. Upon any reorganization,
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consolidation, merger, sale or transfer (and any dissolution following any
transfer) referred to in this Section 5, this Warrant shall continue in full
force and effect and the terms hereof shall be applicable to the shares of stock
and other securities and property receivable on the exercise of this Warrant
after the consummation of such reorganization, consolidation, merger, sale or
transfer or the effective date of dissolution following any such transfer, as
the case may be, and in the case of such reorganization, consolidation or merger
only, shall be binding upon the issuer of any such stock or other securities,
whether or not such Person shall have expressly assumed the terms of this
Warrant as provided in Section 7 hereof.
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6. ADJUSTMENTS FOR ISSUANCE OF CLASS A VOTING COMMON STOCK AND
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AMOUNT OF OUTSTANDING CLASS A VOTING COMMON STOCK. If at any time there shall
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occur any stock split, stock dividend, reverse stock split or other subdivision
of the Company's Class A Voting Common Stock ("Stock Event"), then the number of
shares of Class A Voting Common Stock to be received by the holder of this
Warrant shall be appropriately adjusted such that the proportion of the number
of shares issuable hereunder to the total number of shares of the Company (on a
fully-diluted basis) prior to such Stock Event is equal to the proportion of the
number of shares issuable hereunder after such Stock Event to the total number
of shares of the Company (on a fully-diluted basis) after such Stock Event.
No adjustment of the Exercise Price shall be made in connection with
any adjustment of the number of shares of Class A Voting Common Stock receivable
upon exercise of this Warrant, except that the Exercise Price shall be
proportionately decreased or increased upon the occurrence of any stock split,
reverse stock split or other subdivision of the Class A Voting Common Stock.
7. NO IMPAIRMENT. The Company will not, by amendment of its
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Certificate of Incorporation or thorough any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Warrant. Without limiting the generality of the foregoing, the
Company:
(i) will not increase the par value of any shares of stock
receivable on the exercise of the Warrant above the amount payable
therefor on such exercise;
(ii) will take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
non-assessable shares of stock on the exercise of the Warrant from
time to time outstanding; and
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(iii) will not transfer all or substantially all of its
properties and assets to any other entity (corporate or otherwise), or
consolidate with or merge into any other entity or permit any such
entity to consolidate with or merge into the Company (if the Company
is not the surviving entity), unless such other entity shall expressly
assume in writing and will be bound by all the terms of this Warrant
and the Agreement.
8. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each case of any
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event that may require any adjustment or readjustment in the shares of Class A
Voting Common Stock issuable on the exercise of this Warrant, the Company at its
expense will promptly prepare a certificate setting forth such adjustment or
readjustment, or stating the reasons why no adjustment or readjustment is being
made, and showing, in reasonable detail, the facts upon which any such
adjustment or readjustment is based, including a statement of (i) the number of
shares of the Company's Class A Voting Common Stock then outstanding on a fully-
diluted basis, and (ii) the number of shares of Class A Voting Common Stock to
be received upon exercise of this Warrant, in effect immediately prior to such
adjustment or readjustment and as adjusted an readjusted (if required by Section
6) on account thereof. The Company will forthwith mail a copy of each such
certificate to each holder of a Warrant, and will, on the written request at any
time of any holder of a Warrant, furnish to such holder a like certificate
setting forth the calculations used to determine such adjustment or
readjustment. At its option the holder of a Warrant may confirm the adjustment
noted on the certificate by causing such adjustment to be computed by an
independent certified public accountant at the expense of such holder unless
such accountant determines an error of more than five percent (5%) was made in
the adjustment noted on such certificate, in which case such confirmation shall
be at the expense of the Company.
9. NOTICES OF RECORD DATE. In the event of:
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(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who
are entitled to
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receive any dividend or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any transfer of all or substantially all the assets of the Company to or
any consolidation or merger of the Company with or into any other Person;
or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then, and in each such event, the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend distribution or right, and
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is anticipated to take place, and the time, if any is to be fixed, as
of which the holders of record of Class A Voting Common Stock shall be entitled
to exchange their shares of Class A Voting Common Stock for securities or other
property deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up. Such
notice shall be mailed at least thirty (30) days prior to the date specified in
such notice on which any such action is to be taken.
10. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company
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will at all times reserve and keep available solely for issuance and delivery on
the exercise of this Warrant, a number of shares of Class A Voting Common Stock
equal to the total number of shares of Class A Voting Common Stock from time to
time issuable upon exercise of this Warrant and, from time to time, will take
all steps necessary to amend its Certificate of Incorporation to provide
sufficient reserves of shares of Class A Voting Common Stock issuable upon
exercise of this Warrant.
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11. DEFINITIONS. As used herein the following terms, unless the
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context otherwise requires, have the following respective meanings:
11.1 The term Company shall include the Company and any
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corporation which shall succeed to or assume the obligations of the Company
hereunder.
11.2 The term Class A Voting Common Stock includes (i) the
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Company's Class A Voting Common Stock, $.01 par value per share, (ii) any other
capital stock of any class or classes (however designated) of the Company, the
holders of which shall have the right, without limitation as to amount, either
to all or to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any shares
entitled to preference, and the right to vote at meetings of the shareholders
and (iii) any other securities into which or for which any of the securities
described in clause (i) or (ii) above have been converted or exchanged pursuant
to a plan of recapitalization, reorganization, merger, sale of assets or
otherwise.
11.3 The term Stockholders' Agreement shall mean that certain
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Stockholders' Agreement dated as of July 31, 1997 among the Company, Carousel
Capital Partners, L.P., Xxxxx Investment Associates V, L.P., Xxxxx Equity
Partners V, L.P., MJD Partners, L.P. and certain other parties thereto.
11.4 The term Person shall mean an individual, partnership,
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corporation, association, trust, joint venture, unincorporated organization, and
any government, governmental department or agency or political subdivision
thereof.
12. WARRANT AGENT. The Company may, by written notice to the holder
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of this Warrant, appoint an agent having an office in New York for the purpose
of issuing Class A Voting Common Stock on the exercise of this Warrant pursuant
to Section 2 hereof, and exchanging or replacing this Warrant pursuant to the
Agreement, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
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13. REMEDIES. The Company stipulates that the remedies at law of the
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holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. NOTICES. All notices and other communications from the Company to
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the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, or sent by overnight courier (or sent in the
form of a telex or telecopy) at such address as may have been furnished to the
Company in writing by such holder or, until any such holder furnished to the
Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
15. MISCELLANEOUS. In case any provision of this Warrant shall be
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invalid, illegal or unenforceable, or partially invalid, illegal or
unenforceable, the provision shall be enforced to the extent, if any, that it
may legally be enforced and the validity, legality and enforceability of the
remaining provisions shall not in any wa be affected or impaired thereby. This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by a statement in writing signed by the party against which enforcement of
such change, waiver, discharge or termination is sought. This Warrant shall be
governed by and construed in accordance with the domestic substantive laws (and
not the conflict of law rules) of the State of New York. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof.
16. CERTAIN OTHER AGREEMENTS. By executing the signature page hereto,
the Holder does acknowledge and agree that (a) the Holder has no further rights,
and the Company has no further obligations, under the Original Warrant
(including as a result of operation of Sections 4, 5, 6 or 7 thereof) and (b)
the consummation of the transactions contemplated by the Stock Purchase
Agreement dated as of March 6, 1997 by and among the
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Company, MJD Partners, L.P., Carousel Capital Partners, L.P., Xxxxx Investment
Associates V, L.P., and Xxxxx Equity Partners V, L.P. will not constitute an
event requiring any adjustment to the number of shares of Common Stock issuable
upon exercise pursuant to the terms of either this Warrant or the Original
Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer and its corporate seal to be impressed hereon and
attested by its Secretary.
Dated: July 31, 1997
MJD COMMUNICATIONS, INC.
(Corporate Seal)
By:__________________________________
Name:
Title:
Attest:
___________________________
Secretary
ACCEPTED AND AGREED TO:
___________________________
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FORM OF SUBSCRIPTION
(To be signed only on exercise
of Common Stock Purchase Warrant)
TO: MJD COMMUNICATIONS, INC.
The undersigned, the Holder of the Class A Voting Common Stock
Purchase Warrant, hereby irrevocably elects to exercise this Class A Voting
Common Stock Purchase Warrant for, and to purchase thereunder ___ shares of
Class A Voting Common Stock of MJD COMMUNICATIONS, INC. and herewith makes
payment of $_________ therefor, and requests that the certificates for such
shares be issued in the name of, and delivered to _________, whose address is
_________________________.
Dated:____________ ________________________________________
(Signatures must conform in all
respect to name of Holder as
specified on the face of the
Warrant)
___________________________________
(Address)
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto __________ the right represented by the within Warrant to
purchase ____ shares of Class A Voting Common Stock of MJD COMMUNICATIONS, INC.,
a Delaware corporation, to which the within Warrant related, and appoints
___________ attorney to transfer such right on the books of MJD COMMUNICATIONS,
INC., with full power of substitution in the premises.
Dated:_______________ By:_______________________________
Name:
Title:
_____________________________
(Address)
Signed in the present of:
___________________________
Name:
